Philanthropy in business should be celebrated, but regardless of what cause the company is promoting, the success of the company, its employees and its shareholders should always remain the priority. As an engaged shareholder, it is important to pay attention to the reputational risks involved with where the company is donating charitable dollars.
In Amazon’s 2020 annual meeting, a shareholder proposal was submitted regarding the Southern Poverty Law Center (SPLC) overseeing the AmazonSmile charitable program. On July 30, 2020, Amazon’s CEO, Jeff Bezos, testified at the House antitrust hearing and was questioned by Congressman Matt Gaetz as to why they would trust the SPLC, a well known tool of the American left, to determine which charities would be eligible for the program.
The AmazonSmile platform allows Amazon customers to donate a portion of their purchase proceeds to a nonprofit of their choice on Amazon’s behalf. Charities range from local football teams, adoption facilities, and large organizations like Susan G. Komen. Customers are also able to view each nonprofit’s Wish List and purchase items for them directly.
Amazon entrusts a third-party, SPLC, to manage which charities are approved to receive funds or direct donations through AmazonSmile.
The SPLC is a nonprofit that claims to monitor hate groups and extremists. They have an active “HateWatch” and “Hate Map” that tracks identified groups around the U.S. with an end goal of exposing them to the public and ending them altogether. The SLPC has; however, come under much scrutiny for its offshoring of tens of millions in tax exempt money and the veracity of the criteria used to identify groups as “extremist” or “hateful.” In fact, multiple mainstream organizations have been mistakenly trapped in their criteria, leaving many questioning whether they should be the gatekeepers of the AmazonSmile program.
In the 2020 annual meeting, the presented proposal requested Amazon to report on the reputational risks associated with discrimination against political, religious and social ideologies, specifically in regards to what nonprofits are approved and those that aren’t. Amazon’s Board of Directors recommended to vote against this proposal stating that their current commitments to diversity and inclusion are adequate.
During the questioning from Congressman Matt Gaetz, Bezos stated that their charity selection process is “imperfect” and is willing to review alternatives to the SPLC.
The AmazonSmile program is a great way for Amazon to give back to communities. However, the involvement with such groups as the SPLC causes widespread viewpoint diversity and magnifies the gap between the company’s policies and practices. Rejecting a certain nonprofit simply because its differing viewpoint on religion or politics creates a reputational risk that even a company like Amazon cannot afford.
This is a great example of the value of being an engaged shareholder and voting your proxy. While the result of the annual meeting might not match your vote, it doesn’t have to end there. Continue to be a shareholder who is invested in both a company’s policy and future success.